US to ramp up gas shipments to Europe fivefold

Monday, November 5, 2018 3:00:30 PM

Europe may become the largest consumer of American liquefied natural gas (LNG) after China imposed export tariffs and because of the lower transport cost for it compared to the gas deliveries from Asia, Interfax-Ukraine reports with reference to participants of the KNect365 LNGgc conference in London.

Sam White, director of commercial structuring at the American LNG supplier Cheniere Energy said that he believes that by 2030, Europe may buy as much as 200 million tons of this fuel, as compared to the 40 million tons purchased in 2017. According to him, Atlantic countries will receive roughly half of the US’s LNG exports by this time. White’s colleagues are less optimistic. Texas LNG CEO Vivek Chandra said that American LNG will struggle to compete with Russian pipeline gas, due to the latter’s lower price.

In addition, a lot will depend on the European demand for gas. EU consumers’ reduced consumption of this type of fuel in the next 10-15 years could be a serious problem for the US, since it will have to compete for a shrinking market not only with Russia, but also with Qatar and Algeria, and probably with Egypt, which is striving to become an exporter of LNG.

Mike Fulwood, senior research fellow at the Oxford Institute for Energy Studies, observed that Asia is still the more promising market for American LNG. The gas demand is growing rapidly in India, and the country is signing new contracts to buy from the US.

Furthermore, Washington is putting pressure on Japan and South Korea to buy more gas from the US in order to reduce the significant foreign trade surpluses.